A company that embarks on outsourcing of IT (Information Technology) is simply entrusting its computer and/or internet-related task to an external company. The outsourcing vendor is usually an expert in IT. Some of the aspects of a company’s IT tasks that may be outsourced include programming, data processing as well as technical support. Information Technology Outsourcing is also known as ITO for short, it is also called ITES (IT Enabled Services).
The Driving Force Behind IT Outsourcing
Just like any other business function outsourcing, the driving force for outsourcing a company’s IT tasks is insufficient resources and cost-saving. The cost of obtaining quality IT services offshore is comparatively low – in terms of weighing the cost in-house or within the country. Luckily, there are IT specialized offshore destinations that companies can focus on to ensure the best IT practices and services. Philippines, India and China are the leading locations for information technology outsourcing.
Typically, the American and European companies depend massively on Philippines and India for quality IT outsourcing services, while Japanese companies focus on China for IT services. These offshore destinations are renowned for the best quality IT-related services at amazingly affordable rates. Thus, outsourcing of IT to these locations provides huge cost-saving for businesses and companies.
Other advantages of IT outsourcing include;
Access to world-class IT experts; as mentioned earlier, Information Technology experts from renowned offshore locations have global recognition. So, the degree of IT expertise that a company could not have possibly afforded in-house or within the country is accessed with ease and cheaper through outsourcing. Access to the best IT intellectuals and wider knowledge is one of the excellent incentives for outsourcing IT.
The core activities of the company are re-visited; when the complex aspects of a business are entrusted in the hands of an external company, it helps to re-focus on the core values or activities of a company. Such core activities are usually associated with the fame or growth of any organization.
Enhanced Quality: Outsourcing of IT is also a great way to enhance quality, since the task is entrusted into the hands of experts.
Improved capacity for innovation; organizations employ external knowledge as a strategy for supplementing limited in-house capacity. Ultimately, companies achieve improved capacity for innovation by taking advantage of external knowledge (outsourcing). This is particularly very beneficial in the area of information technology.
Liability Transfer; when a company outsources its IT tasks, some of the potential risks associated with such tasks are indirectly transferred to the outsourcing vendor as well. Even if the company has to share the risk, the percentage that would accrue to them is usually lower.
Indeed, outsourcing of IT is one of the meaningful operational decisions that a company can take, especially when it is done for the right reasons.
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